Canada Self-Storage Outlook 2025: Six Industry Experts Weigh In

Donald Trump has just reclaimed the White House in the U.S., with pundits speculating that the majority of Americans who voted for him were persuaded by his promises to fix the economy. Now, despite a recent shakeup, Canada is poised for its own election in October, and indications are that Canadians will be voting with their wallets too. According to new polling conducted for Global News, one in four respondents ranked inflation and the cost of living as their top priority today. So how do politics and the economy impact self-storage? Six industry experts gathered for this 2025 Canadian Self-Storage Outlook count the ways.

Note: Interviews took place Dec. 6 to 29, 2024.

DAVID ALLAN, CEO, Apple Self Storage 

JAN BELIK, Acquisitions and Development, StorageVault 

SCOTT HUMPHREYS, President, Canadian Self-Storage Valuation Services 

JASON KOONIN, CEO, Bluebird Self Storage 

ROBERT MADSEN, President, CSSA and U-Lock Mini Storage 

JOE SHOEN, CEO, U-Haul  

Former Bank of Canada Governor Stephen Poloz has stated the country is in a recession and that immigration had skewed economic data, making the economy appear stronger than it is. What are your thoughts, and how do you expect this to impact self-storage? 

HUMPHREYS: To say the only reason Canada hasn’t had two consecutive periods of negative growth is because immigrants are doing all the spending is just stupid. I would be reluctant to listen to anything Poloz says; he’s just pissed that the Bank of Canada is dropping the interest rate sooner than he said it should be. The lower interest rates will promote spending among everyone, not just immigrants, and as such lessen the potential for recession. 

ALLAN: I don’t know that “recession” means what it used to; I think it’s become too politicized, so I’ll just say that what we’ve experienced is that self-storage is really good when times are good and very resilient when times are bad. It’s the in-between times that we seem to struggle, which is what is happening now. 

BELIK: I do believe the country is in a recession. Unemployment rates are up, the costs of everyday goods are up, and wages haven’t caught up. The good news is that the country is working through these issues, and I don’t expect Canada to be in a long recessionary cycle. The impact on self-storage growth will be a slower lease up for new operations and a lower/slower increase on ECRIs for existing operations. 

MADSEN: Considering the high price of housing, taxes, food, gas, I agree with Poloz and that immigration numbers have blurred the numbers. If it wasn’t for their spending, we would’ve hit the technical definition of a recession. It’ll improve, but it’ll take time. The Canadian economy is slower than the U.S., for example. When there’s an issue down there, Americans react quickly and make moves. In Canada, we tend to overanalyze things, so it takes longer for momentum to build and changes to be made. 

HUMPHREYS: We need to remember that it was only four years ago that we were in a global pandemic. Governments were spending like drunken sailors to avoid a depression and the general population was spending money they didn’t have just because the government gave them some. It will take time to recover from that. 

A recession impacts discretionary spending, which could put self-storage on the chopping block for some people. Are you seeing this? How can operators retain tenants or bring in new ones? 

KOONIN: Rising costs of housing and food have put extreme pressure on consumers. As a result, we experienced record-high vacates of storage units in 2024. However, inflation has moderated from very high levels in 2021 and 2022 to just two percent in recent periods. This should bode well for consumers in 2025. 

HUMPHREYS: From a positive standpoint, a recession creates sustained economic uncertainty, which could pressure people to downsize or relocate to more affordable markets, increasing demand for self-storage. However, recession also brings weakened consumer spending, which is usually a major driver of self-storage demand. Operators might have to get creative with marketing or what they offer to attract consumers. 

SHOEN: It’s important to keep innovating. Every time the industry ups its game, consumers respond favorably. That’s why we’re all in on U-Box. Trucks burn a lot of gas, and you get much more fuel efficiency transporting six to 10 U-Boxes than individuals driving six to 10 trucks. An 800-mile truck rental is not uncommon in Canada. For the maritime providences, that can be 6,000 miles. U-Box is so much more economical in these cases, I’m confident it’s going to do great here. 

Home sales have been lagging, which often impacts self-storage. Do you see the housing market improving and driving self-storage activity? 

ALLAN: The reports are coming out favorably, but I’m not feeling it. It certainly still feels like the housing market’s frozen up at the moment. 

MADSEN: 2024 was a really crappy year; I’d say it had the lowest demand I’ve ever seen in my time in the industry. So, doing better than 2024 is a pretty low bar to clear. That said, I’m optimistic things will get better, with interest rates rapidly decreasing, mortgage terms improving, and sellers lowering their overinflated prices out of impatience. In fact, we’re leading the G7 [an informal political and economic forum that brings together seven of the world’s most advanced economies: Canada, France, Germany, Italy, Japan, U.K., U.S.] when it comes to economic issues. 

BELIK: Eventually the housing market will get better. As interest rates continue to drop, I do expect activity in most parts of the country to pick up, but some provinces will struggle due to the lack of supply of new housing. 

Are lenders willing to gamble with self-storage right now? Is it possible to secure financing for independent operators, or does the market just favor larger operators and REITs? 

MADSEN: It’s going to be tight for independents, but if they have existing financing, they’ll probably be able to maneuver through construction. It’s a good market for alternative lenders now; they’re at a higher rate though, so keep that in mind. Regardless, independents are going to have to do more work if they want new financing or they’re up for refinancing. Get sharper on expenses, collections, closing sales. We got too comfortable in 2021 to 2022. Now we have to work for the wins. 

ALLAN: When I talk to bankers, my sense is that they see self-storage not as a gamble but a pretty safe retreat. We’re typically borrowing at 60 percent loan to value (LTV), significantly less than some other asset classes. The only issue is that there's not enough high-quality assets for banks to lend on, so there’s a lot of competition for the ones that are out there. 

BELIK: I think independent operators are finding it really difficult right now to secure conventional financing. Larger operators may also be experiencing some challenges but can usually leverage their existing relationships with multiple lenders and potential future business if they are in growth mode. 

HUMPHREYS: Lenders are exercising increased caution in all asset classes in Canada, which is apparent in stringent LTV ratios I see. However, there does appear to be some interest from lenders in the self-storage space, and there is still opportunity for smaller, independent operators to connect with these types of lenders, like credit unions and specialized self-storage lending services, as long as they have a grasp on the industry and asset class. 

ALLAN: Banks are willing to lend on development projects for those with little experience if there’s a professional operator involved—someone who knows about unit mix, underwriting, operations, and so on. And that’s a reasonable ask, because a first-time developer won’t know whether they can lease up 100,000 or 10,000 feet in a year. They’ve never done it, so everything is an assumption. Of course, we make assumptions too, but they’re based on experience. 

Do you foresee more builds in 2025? Is it a good time to develop or invest in anticipation of better days ahead, or is it best to sit tight? 

KOONIN: Development activity is picking up in Canada, but the country is still significantly undersupplied. Therefore, it’s best to develop in many—but not all—submarkets. 

BELIK: I think the question of more builds in 2025 really depends on how well funded the groups are, their end game, and what kind of access they have to debt. Some markets in Canada do have a need for storage, so if the numbers make sense, then they should build. 

SHOEN: I’m bullish on self-storage, and I encourage anyone who wants to build to do it. 

Canada doesn’t seem to be playing such drastic rate games as the U.S. (street rates vs. ECRIs), however it is happening at some level. How is this impacting not just rentals and occupancy but underwriting as well? 

HUMPHREYS: We’ve observed an increase in the delta between advertised rates and effective rates in Canada over the past year, especially for larger operators. Incentives and concessions are higher, but purchasers and underwriters are looking deeper at the effective gross income, rather than the potential gross income, and the resulting NOI to determine value. 

KOONIN: Some U.S. operators are playing bait and switch games in Canada, offering low prices and then hitting tenants with 100 percent to 200 percent increases 90 days later. They are really struggling to figure out the market and their prices reflect that. Canadian consumers aren’t happy with these games, and so they take their business to other storage companies that operate with integrity and transparency. This all has a large impact on underwriting because the gross potential is significantly lower, and nobody can figure out what stabilized effective rents will be. 

MADSEN: When someone is giving units away with discounts, I want to say, “Where are your sales skills?” Get savvier about sales and you won’t have to play these games. 

ALLAN: There’s a place for some of these strategies though. You have to look at the competitive landscape. Maybe you want to keep with the flow of traffic, right? When everybody is going 120 KPH and you’re going the speed limit, even though you’re not doing anything wrong, you’re still causing a disruption. And while you still want to make your own choices and set your own strategy, you don’t need to be a pariah doing extremes of 150 or 80 KPH. 

MADSEN: I question the lifetime revenue of new tenants brought in at some of the crazy discounted rates. If they’re not staying long enough to reach a threshold, and it’s costing more to bring them in than you make over their stay, you’ve just given away your units for nothing and you’re on the road to bankruptcy. At the CSSA (Canadian Self Storage Association), we’re trying to educate on these matters, getting owners to create informed policies and understand that occupancy doesn’t equal success when it’s based on price breaks for units that could’ve gone for half the discounted price. 

What do you think the biggest hindrances will be for existing properties in 2025? 

BELIK: The biggest ones right now for existing players in my opinion would be property tax, staffing, new competition opening up next door, and rate wars. 

HUMPHREYS: For existing facilities, I feel the main hindrance will be saturation levels. There have been significant builds in a few concentrated areas over the last three to five years, which have dramatically increased supply and options for customers. 

SHOEN: Some markets are overbuilt, but that can happen when there’s a temporary frenzy in a hot spot. But there’s still a lot of room to grow in the storage business. And if you decide to build, you can expect to get a call from us asking if you want to be a U-Haul dealer! We can help new owners get started. 

What do you feel are the biggest barriers to entry for new developers? 

KOONIN: A big one is the lack of understanding by institutional investors in both Canada and the U.S. about Canadian self-storage. There is almost nobody who understands how to underwrite it, and as a result, it helps keep a lot of competition out of the market. 

BELIK: I say the top five are land costs, construction costs, financing, competition, and development fees at the municipal level. 

ALLAN: Development fees for sure. They used to be about eight bucks a foot. Now it’s anywhere from $30 to $50 a foot. So, when you’re building a 100,000-square-foot building, you’re paying $3 million to $5 million in city taxes. This has just become a pay to play, and it’s quite destructive from an investment perspective. I suppose you could call it a pro in that fewer storage facilities get developed, so there’s less overbuilding, but the downside for those that do get built is those costs have to be passed back to the consumer. 

HUMPHREYS: I’d say the major roadblock is zoning and land use regulations. Local municipalities have shown resistance to self-storage as a permitted use. These hurdles place a premium on new construction, so most larger operators accept the increased risk of absorbing an asset from a negative cash flow or one with unfavorable characteristics, like lower efficiency ratings or sub-optimal locations. 

SHOEN: Development and construction costs are up, zoning can be difficult, and so on. But you’ve got to work through these things one at a time. Dial some of those construction costs back if you can, for example. Just keep working at it until it makes sense. 

KOONIN: I’ve seen many developers do one project, and after discovering how hard it was, they never do another. Also, some operators struggle to retain staff and have decided to eliminate employees as a result. We still believe in the importance of customer service but appear to be in the minority these days. 

SHOEN: There has to be some staff around. Remote doesn’t mean no one on site, rather it’s about giving people more self-service options. Completely unmanned, in my experience, is not a good solution. 

Will this year’s federal election have a big impact on self-storage? Do you feel one candidate would be better for the industry than another? 

HUMPHREYS: We have a similar political issue as the U.S. … they are all idiots. 

MADSEN: Fiscally, Trudeau is a disaster, and his government is in disarray. Even if he once had good plans and policies, he’s well past his expiration date. His finance minister Chrystia Freeland just resigned and left a scathing letter and there have been calls from his own party to step down. He’s simply not good for business, and storage is going to benefit under a more conservative government, which looks to be the direction we’re going. I wouldn’t be surprised if there’s a snap election by spring to oust him, honestly.  

KOONIN: Most of the [political] fears and threats everyone spends time worrying about never actually happen. A candidate that can get inflation under control and help grow the economy will be better for self-storage. Population growth and housing mobility remain key drivers for the industry and the outlook for both is positive. 

BELIK: I don’t know that one party would necessarily benefit the industry more than the other, and I think that the only policy really impacting self-storage is more on the municipal/provincial government level with things like property taxes, zoning, development, and approvals for new builds and expansions. 

HUMPHREYS: Any policies which introduce things such as stricter rent control, higher property tax, or other mandates could negatively impact current self-storage operators. If the new government offers incentives to developers to increase housing supply rapidly, without all the municipal red tape, this could benefit the storage industry. 

ALLAN: Obviously different political policies could have a significant impact on our operations, but I think that it’s our responsibility as a business and to our partners to just be as effective as we can whether the political landscape is leaning left or right. 

Wrapping Up 

That’s a wrap! Thanks to everyone who participated for your time and insights. It’s going to be an interesting 2025 to say the least, and your contributions will help everyone make their own conclusions and prepare for the year ahead. Want to be part of our discussion for 2026? Drop me a line at brad@modernstoragemedia.com or visit self-storagecanada.ca to send a message. See you at the 2026 discussion!  

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Brad Hadfield is MSM’s web manager and a news and exclusives writer.